130th Ohio General Assembly
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H. B. No. 464  As Introduced
As Introduced

128th General Assembly
Regular Session
2009-2010
H. B. No. 464


Representatives Winburn, Phillips 

Cosponsors: Representatives Letson, Murray, Mallory, Domenick, Fende, Lundy, Yuko, Williams, S., Garland, Brown, Hagan 



A BILL
To amend sections 5727.01, 5727.02, 5727.06, 5727.11, 5727.111, and 5727.15 and to enact section 5727.75 of the Revised Code to exempt qualifying wind and solar energy facilities from property taxation for up to 20 years and to require payments in lieu of taxes on the basis of each megawatt of production capacity of such facilities.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1.  That sections 5727.01, 5727.02, 5727.06, 5727.11, 5727.111, and 5727.15 be amended and section 5727.75 of the Revised Code be enacted to read as follows:
Sec. 5727.01.  As used in this chapter:
(A) "Public utility" means each person referred to as a telephone company, telegraph company, electric company, natural gas company, pipe-line company, water-works company, water transportation company, heating company, rural electric company, railroad company, or combined company, wind energy company, or solar energy company.
(B) "Gross receipts" means the entire receipts for business done by any person from operations as a public utility, or incidental thereto, or in connection therewith, including any receipts received under Chapter 4928. of the Revised Code. The gross receipts for business done by an incorporated company engaged in operation as a public utility includes the entire receipts for business done by such company under the exercise of its corporate powers, whether from the operation as a public utility or from any other business.
(C) "Rural electric company" means any nonprofit corporation, organization, association, or cooperative engaged in the business of supplying electricity to its members or persons owning an interest therein in an area the major portion of which is rural.
(D) Any person:
(1) Is a telegraph company when engaged in the business of transmitting telegraphic messages to, from, through, or in this state;
(2) Is a telephone company when primarily engaged in the business of providing local exchange telephone service, excluding cellular radio service, in this state;
(3) Is an electric company when engaged in the business of generating, transmitting, or distributing electricity within this state for use by others, but excludes a rural electric company;
(4) Is a natural gas company when engaged in the business of supplying or distributing natural gas for lighting, power, or heating purposes to consumers within this state, excluding a person that is a governmental aggregator or retail natural gas supplier as defined in section 4929.01 of the Revised Code;
(5) Is a pipe-line company when engaged in the business of transporting natural gas, oil, or coal or its derivatives through pipes or tubing, either wholly or partially within this state;
(6) Is a water-works company when engaged in the business of supplying water through pipes or tubing, or in a similar manner, to consumers within this state;
(7) Is a water transportation company when engaged in the transportation of passengers or property, by boat or other watercraft, over any waterway, whether natural or artificial, from one point within this state to another point within this state, or between points within this state and points without this state;
(8) Is a heating company when engaged in the business of supplying water, steam, or air through pipes or tubing to consumers within this state for heating purposes;
(9) Is a railroad company when engaged in the business of owning or operating a railroad either wholly or partially within this state on rights-of-way acquired and held exclusively by such company, or otherwise, and includes a passenger, street, suburban, or interurban railroad company;
(10) Is a wind energy company when engaged in the business of generating, transmitting, or distributing electricity within this state for use by others through means of a wind turbine or wind turbines with an aggregate nameplate capacity in excess of two hundred fifty kilowatts;
(11) Is a solar energy company when engaged in the business of generating, transmitting, or distributing electricity within this state for use by others through means of equipment located at a solar energy facility and designed to capture the radiant light and heat from the sun with a nameplate capacity in excess of two hundred fifty kilowatts.
As used in division (D)(2) of this section, "local exchange telephone service" means making available or furnishing access and a dial tone to all persons within a local calling area for use in originating and receiving voice grade communications over a switched network operated by the provider of the service within the area and for gaining access to other telecommunication services.
(E) "Taxable property" means the property required by section 5727.06 of the Revised Code to be assessed by the tax commissioner, but does not include either of the following:
(1) An item of tangible personal property that for the period subsequent to the effective date of an air, water, or noise pollution control certificate and continuing so long as the certificate is in force, has been certified as part of the pollution control facility with respect to which the certificate has been issued;
(2) An item of tangible personal property that during the construction of a plant or facility and until the item is first capable of operation, whether actually used in operation or not, is incorporated in or being held exclusively for incorporation in that plant or facility.
Notwithstanding section 5701.03 of the Revised Code, for tax year 2006 and thereafter, "taxable property" includes patterns, jigs, dies, and drawings of an electric company or a combined company for use in the activity of an electric company.
(F) "Taxing district" means a municipal corporation of or township, or part thereof, in which the aggregate rate of taxation is uniform.
(G) "Telecommunications service" has the same meaning as in division (AA) of section 5739.01 of the Revised Code.
(H) "Interexchange telecommunications company" means a person that is engaged in the business of transmitting telephonic messages to, from, through, or in this state, but that is not a telephone company.
(I) "Sale and leaseback transaction" means a transaction in which a public utility or interexchange telecommunications company sells any tangible personal property to a person other than a public utility or interexchange telecommunications company and leases that property back from the buyer.
(J) "Production equipment" means all taxable steam, nuclear, hydraulic, and other production plant equipment used to generate electricity. For tax years prior to 2001, "production equipment" includes taxable station equipment that is located at a production plant.
(K) "Tax year" means the year for which property or gross receipts are subject to assessment under this chapter. This division does not limit the tax commissioner's ability to assess and value property or gross receipts outside the tax year.
(L) "Combined company" means any person engaged in the activity of an electric company or rural electric company that is also engaged in the activity of a heating company or a natural gas company, or any combination thereof.
(M) "Public utility property lessor" means any person, other than a public utility or an interexchange telecommunications company, that leases personal property, other than in a sale and leaseback transaction, to a public utility, other than a railroad, water transportation, telephone, or telegraph company if the property would be taxable property if owned by the public utility. A public utility property lessor is subject to this chapter only for the purposes of reporting and paying tax on taxable property it leases to a public utility other than a telephone or telegraph company. A public utility property lessor that leases property to a public utility other than a telephone or telegraph company is not a public utility, but it shall report its property and be assessed in the same manner as the utility to which it leases the property.
(N) "Wind energy conversion equipment" means tangible personal property connected to a wind turbine tower and through which electricity is transferred from the turbine generator to controls, transformers, or power electronics and to the transmission interconnection point. "Wind energy conversion equipment" includes, but is not limited to, collection lines, ancillary tangible personal property, substations, and any lines and associated tangible personal property located between substations and the transmission interconnection point.
(O) "Solar energy conversion equipment" means tangible personal property that is connected to and behind solar radiation collector areas and that is designed to convert the radiant energy of the sun into electricity or heat. "Solar energy conversion equipment" includes, but is not limited to, inverters, batteries, switch gears, wiring, collection lines, substations, ancillary tangible personal property necessary for radiant energy conversion or storage, or any lines and associated tangible personal property located between substations and the transmission interconnection point that operate on direct current or generate direct current.
(P) "Wind energy facility" means one or more interconnected wind turbines owned by the same person, including:
(1) All interconnection equipment, devices, and related apparatus connected to the wind turbine generators;
(2) All cables, equipment, devices, and related apparatus that connect the wind turbine generators to an electricity grid or to a building or facility that directly consumes the electricity produced, that facilitate the transmission of electrical energy from the generators to the grid, building, or facility, and, where applicable, that transform voltage before ultimate delivery of electricity to the grid, building, or facility.
(Q) "Solar energy facility" means one or more interconnected solar panels owned by the same person, including:
(1) All interconnection equipment, devices, and related apparatus connected to the solar panels;
(2) All cables, equipment, devices, and related apparatus that connect the solar panels to an electricity grid or to a building or facility that directly consumes the electricity produced, that facilitate the transmission of electrical energy from the solar panels to the grid, building, or facility, and, where applicable, that transform voltage before ultimate delivery of electricity to the grid, building, or facility.
(R) "Nameplate capacity" means the original maximum rated output of a generator or other electric production equipment under specific conditions designated by the manufacturer, expressed in the number of kilowatts or megawatts.
Sec. 5727.02.  As used in this chapter, "public utility," "electric company," "natural gas company," "pipe-line company," "water-works company," "water transportation company" or "heating company" does not include any of the following:
(A)(1) Except as provided in division (A)(2) of this section, any person that is engaged in some other primary business to which the supplying of electricity, heat, natural gas, water, water transportation, steam, or air to others is incidental. As used in division (A) of this section and in section 5727.031 of the Revised Code, "supplying of electricity" means generating, transmitting, or distributing electricity.
(2) For tax year 2009 and each tax year thereafter, a person that is engaged in some other primary business to which the supplying of electricity to others is incidental shall be treated as an "electric company" and a "public utility" for purposes of this chapter solely to the extent required by section 5727.031 of the Revised Code.
(3) For purposes of division (A) of this section and section 5727.031 of the Revised Code:
(a) "Supplying of electricity" means generating, transmitting, or distributing electricity.
(b) A person that leases to others wind energy facilities or solar energy facilities with an aggregate nameplate capacity in this state of two hundred fifty kilowatts or less per lease is not supplying electricity to others.
(c) A person that owns, or leases from another person, wind energy facilities or solar energy facilities with an aggregate nameplate capacity in this state of two hundred fifty kilowatts or less is not supplying electricity to others, regardless of whether the owner or lessee engages in net metering as defined in section 4928.01 of the Revised Code.
(B) Any person that supplies electricity, natural gas, water, water transportation, steam, or air to its tenants, whether for a separate charge or otherwise;
(C) Any person whose primary business in this state consists of producing, refining, or marketing petroleum or its products.
(D) Any person whose primary business in this state consists of producing or gathering natural gas rather than supplying or distributing natural gas to consumers.
Sec. 5727.06.  (A) Except as otherwise provided by law, the following constitutes the taxable property of a public utility, interexchange telecommunications company, or public utility property lessor that shall be assessed by the tax commissioner:
(1) For tax years before tax year 2006:
(a) In the case of a railroad company, all real property and tangible personal property owned or operated by the railroad company in this state on the thirty-first day of December of the preceding year;
(b) In the case of a water transportation company, all tangible personal property, except watercraft, owned or operated by the water transportation company in this state on the thirty-first day of December of the preceding year and all watercraft owned or operated by the water transportation company in this state during the preceding calendar year;
(c) In the case of all other public utilities and interexchange telecommunications companies, all tangible personal property that on the thirty-first day of December of the preceding year was both located in this state and:
(i) Owned by the public utility or interexchange telecommunications company; or
(ii) Leased by the public utility or interexchange telecommunications company under a sale and leaseback transaction.
(2) For tax years 2006, 2007, and 2008:
(a) In the case of a railroad company, all real property used in railroad operations and tangible personal property owned or operated by the railroad company in this state on the thirty-first day of December of the preceding year;
(b) In the case of a water transportation company, all tangible personal property, except watercraft, owned or operated by the water transportation company in this state on the thirty-first day of December of the preceding year and all watercraft owned or operated by the water transportation company in this state during the preceding calendar year;
(c) In the case of all other public utilities except telephone and telegraph companies, all tangible personal property that on the thirty-first day of December of the preceding year was both located in this state and either owned by the public utility or leased by the public utility under a sale and leaseback transaction.
(3) For tax year 2009 and each tax year thereafter:
(a) In the case of a railroad company, all real property used in railroad operations and tangible personal property owned or operated by the railroad company in this state on the thirty-first day of December of the preceding year;
(b) In the case of a water transportation company, all tangible personal property, except watercraft, owned or operated by the water transportation company in this state on the thirty-first day of December of the preceding year and all watercraft owned or operated by the water transportation company in this state during the preceding calendar year;
(c) In the case of all other public utilities except telephone and telegraph companies, all tangible personal property that on the thirty-first day of December of the preceding year was both located in this state and either owned by the public utility or leased by the public utility under a sale and leaseback transaction;
(d) In the case of a public utility property lessor, all personal property that on the thirty-first day of December of the preceding year was both located in this state and leased, in other than a sale and leaseback transaction, to a public utility other than a railroad, telephone, telegraph, or water transportation company. The assessment rate used under section 5727.111 of the Revised Code shall be based on the assessment rate that would apply if the public utility owned the property.
(4) For tax years 2005 and 2006, in the case of telephone, telegraph, or interexchange telecommunications companies, all tangible personal property that on the thirty-first day of December of the preceding year was both located in this state and either owned by the telephone, telegraph, or interexchange telecommunications company or leased by the telephone, telegraph, or interexchange telecommunications company under a sale and leaseback transaction.
(5)(a) For tax year 2007 and thereafter, in the case of telephone, telegraph, or interexchange telecommunications companies, all tangible personal property shall be listed and assessed for taxation under Chapter 5711. of the Revised Code, but the tangible personal property shall be valued in accordance with this chapter using the composite annual allowances and other valuation procedures prescribed under section 5727.11 of the Revised Code by the tax commissioner for such property for tax year 2006, notwithstanding any section of Chapter 5711. of the Revised Code to the contrary.
(b) A telephone, telegraph, or interexchange telecommunications company subject to division (A)(5)(a) of this section shall file a combined return with the tax commissioner in accordance with section 5711.13 of the Revised Code even if the company has tangible personal property in only one county. Such a company also is subject to the issuance of a preliminary assessment certificate by the tax commissioner under section 5711.25 of the Revised Code. Such a company is not required to file a county supplemental return under section 5711.131 of the Revised Code.
(6) In the case of a wind energy company or a solar energy company, for tax year 2011 and each tax year thereafter, all tangible personal property that on the thirty-first day of December of the preceding year was both located in this state and either owned by the wind energy company or solar energy company or leased by the wind energy company or solar energy company under a sale and leaseback transaction, and that is not exempted from taxation under section 5727.75 of the Revised Code.
(B) This division applies to tax years before tax year 2007.
In the case of an interexchange telecommunications company, all taxable property shall be subject to the provisions of this chapter and shall be valued by the commissioner in accordance with division (A) of section 5727.11 of the Revised Code. A person described by this division shall file the report required by section 5727.08 of the Revised Code. Persons described in this division shall not be considered taxpayers, as defined in division (B) of section 5711.01 of the Revised Code, and shall not be required to file a return and list their taxable property under any provision of Chapter 5711. of the Revised Code.
(C) The lien of the state for taxes levied each year on the real and personal property of public utilities and interexchange telecommunications companies and on the personal property of public utility property lessors shall attach thereto on the thirty-first day of December of the preceding year.
(D) Property that is required by division (A)(3)(b) of this section to be assessed by the tax commissioner under this chapter shall not be listed by the owner of the property under Chapter 5711. of the Revised Code.
(E) The ten-thousand-dollar exemption provided for in division (C)(3) of section 5709.01 of the Revised Code does not apply to any personal property that is valued under this chapter.
(F) The tax commissioner may adopt rules governing the listing of the taxable property of public utilities and interexchange telecommunications companies and the determination of true value.
Sec. 5727.11.  (A) Except as otherwise provided in this section, the true value of all taxable property, except property of a railroad company, required by section 5727.06 of the Revised Code to be assessed by the tax commissioner shall be determined by a method of valuation using cost as capitalized on the public utility's books and records less composite annual allowances as prescribed by the commissioner. If the commissioner finds that application of this method will not result in the determination of true value of the public utility's taxable property, the commissioner may use another method of valuation.
(B)(1) Except as provided in division (B)(2) of this section, the true value of current gas stored underground is the cost of that gas shown on the books and records of the public utility on the thirty-first day of December of the preceding year.
(2) For tax year 2001 and thereafter, the true value of current gas stored underground is the quotient obtained by dividing (a) the average value of the current gas stored underground, which shall be determined by adding the value of the gas on hand at the end of each calendar month in the calendar year preceding the tax year, or, if applicable, the last day of business of each month for a partial month, divided by (b) the total number of months the natural gas company was in business during the calendar year prior to the beginning of the tax year. with the approval of the tax commissioner, a natural gas company may use a date other than the end of a calendar month to value its current gas stored underground.
(C) The true value of noncurrent gas stored underground is thirty-five per cent of the cost of that gas shown on the books and records of the public utility on the thirty-first day of December of the preceding year.
(D)(1) Except as provided in division (D)(2) of this section, the true value of the production equipment of an electric company and the true value of all taxable property of a rural electric company is the equipment's or property's cost as capitalized on the company's books and records less fifty per cent of that cost as an allowance for depreciation and obsolescence.
(2) The true value of the production equipment, wind energy conversion equipment, or solar energy conversion equipment of an electric company or, rural electric company, wind energy company, or solar energy company purchased, transferred, or placed into service after the effective date of this amendment October 5, 1999, is the purchase price of the equipment as capitalized on the company's books and records less composite annual allowances as prescribed by the tax commissioner.
(E) The true value of taxable property, except property of a railroad company, required by section 5727.06 of the Revised Code to be assessed by the tax commissioner shall not include the allowance for funds used during construction or interest during construction that has been capitalized on the public utility's books and records as part of the total cost of the taxable property. This division shall not apply to the taxable property of an electric company or a rural electric company, excluding transmission and distribution property, first placed into service after December 31, 2000, or to the taxable property a person purchases, which includes transfers, if that property was used in business by the seller prior to the purchase.
(F) The true value of watercraft owned or operated by a water transportation company shall be determined by multiplying the true value of the watercraft as determined under division (A) of this section by a fraction, the numerator of which is the number of revenue-earning miles traveled by the watercraft in the waters of this state and the denominator of which is the number of revenue-earning miles traveled by the watercraft in all waters.
(G) The cost of property subject to a sale and leaseback transaction is the cost of the property as capitalized on the books and records of the public utility owning the property immediately prior to the sale and leaseback transaction.
(H) The cost as capitalized on the books and records of a public utility includes amounts capitalized that represent regulatory assets, if such amounts previously were included on the company's books and records as capitalized costs of taxable personal property.
(I) Any change in the composite annual allowances as prescribed by the commissioner on a prospective basis shall not be admissible in any judicial or administrative action or proceeding as evidence of value with regard to prior years' taxes. Information about the business, property, or transactions of any taxpayer obtained by the commissioner for the purpose of adopting or modifying the composite annual allowances shall not be subject to discovery or disclosure.
Sec. 5727.111.  The taxable property of each public utility, except a railroad company, and of each interexchange telecommunications company shall be assessed at the following percentages of true value:
(A) Fifty In the case of a rural electric company, fifty per cent in the case of the its taxable transmission and distribution property of a rural electric company, eighty-five per cent in the case of its wind or solar energy conversion equipment, and twenty-five per cent for all its other taxable property;
(B) In the case of a telephone or telegraph company, twenty-five per cent for taxable property first subject to taxation in this state for tax year 1995 or thereafter for tax years before tax year 2007, and pursuant to division (H) of section 5711.22 of the Revised Code for tax year 2007 and thereafter, and the following for all other taxable property:
(1) For tax years prior to 2005, eighty-eight per cent;
(2) For tax year 2005, sixty-seven per cent;
(3) For tax year 2006, forty-six per cent;
(4) For tax year 2007 and thereafter, pursuant to division (H) of section 5711.22 of the Revised Code.
(C) Twenty-five per cent in the case of a natural gas company.
(D) Eighty-eight per cent in the case of a pipe-line, water-works, or heating company;
(E)(1) For tax year 2005, eighty-eight per cent in the case of the taxable transmission and distribution property of an electric company, and twenty-five per cent for all its other taxable property;
(2) For tax year 2006 and each tax year thereafter, eighty-five per cent in the case of the taxable transmission and distribution property of an electric company, and twenty-four per cent for all its other taxable property.
(F)(1) Twenty-five per cent in the case of an interexchange telecommunications company for tax years before tax year 2007;
(2) Pursuant to division (H) of section 5711.22 of the Revised Code for tax year 2007 and thereafter.
(G) Twenty-five per cent in the case of a water transportation company;
(H) For tax year 2011 and each tax year thereafter, twenty-four per cent in the case of the taxable production equipment of a solar energy company or wind energy company, and eighty-five per cent for all other taxable property.
Sec. 5727.15.  When all the taxable property of a public utility is located in one taxing district, the tax commissioner shall apportion the total taxable value thereof to that taxing district.
When taxable property of a public utility is located in more than one taxing district, the commissioner shall apportion the total taxable value thereof among the taxing districts as follows:
(A)(1) In the case of a telegraph, interexchange telecommunications, or telephone company that owns miles of wire in this state, the value apportioned to each taxing district shall be the same percentage of the total value apportioned to all taxing districts as the miles of wire owned by the company within the taxing district are to the total miles of wire owned by the company within this state;
(2) In the case of a telegraph, interexchange telecommunications, or telephone company that does not own miles of wire in this state, the value apportioned to each taxing district shall be the same percentage of the total value apportioned to all taxing districts as the cost of the taxable property physically located in the taxing district is of the total cost of all taxable property physically located in this state.
(B) In the case of a railroad company:
(1) The taxable value of real and personal property not used in railroad operations shall be apportioned according to its situs;
(2) The taxable value of personal property used in railroad operations shall be apportioned to each taxing district in proportion to the miles of track and trackage rights, weighted to reflect the relative use of such personal property in each taxing district;
(3) The taxable value of real property used in railroad operations shall be apportioned to each taxing district in proportion to its relative value in each taxing district.
(C)(1) Prior to tax year 2001, in the case of an electric company:
(a) Seventy per cent of the taxable value of all production equipment and of all station equipment that is not production equipment shall be apportioned to the taxing district in which such property is physically located; and
(b) The remaining value of such property, together with the value of all other taxable personal property, shall be apportioned to each taxing district in the per cent that the cost of all transmission and distribution property physically located in the taxing district is of the total cost of all transmission and distribution property physically located in this state.
(c) If an electric company's taxable value for the current year includes the value of any production equipment at a plant at which the initial cost of the plant's production equipment exceeded one billion dollars, then prior to making the apportionments required for that company by division (C)(1)(a) and (b) of this section, the tax commissioner shall do the following:
(i) Subtract four hundred twenty million dollars from the total taxable value of the production equipment at that plant for the current tax year.
(ii) Multiply the difference thus obtained by a fraction, the numerator of which is the portion of the taxable value of that plant's production equipment included in the company's total value for the current tax year, and the denominator of which is the total taxable value of such equipment included in the total taxable value of all electric companies for such year;
(iii) Apportion the product thus obtained to taxing districts in the manner prescribed in division (C)(1)(b) of this section.
(iv) Deduct the amounts so apportioned from the taxable value of the company's production equipment at the plant, prior to making the apportionments required by divisions (C)(1)(a) and (b) of this section.
For purposes of division (C)(1)(c) of this section, "initial cost" applies only to production equipment of plants placed in commercial operation on or after January 1, 1987, and means the cost of all production equipment at a plant for the first year the plant's equipment was subject to taxation.
(2) For tax year 2001 and thereafter, in the case of an electric company:
(a) The taxable value of all production equipment shall be apportioned to the taxing district in which such property is physically located; and
(b) The value of taxable personal property, other than including wind and solar energy conversion equipment but excluding production equipment, shall be apportioned to each taxing district in the proportion that the cost of such other taxable personal property physically located in each taxing district is of the total cost of such other taxable personal property physically located in this state.
(D) For tax year 2011 and thereafter, in the case of the taxable property of a wind energy company or solar energy company:
(1) The taxable value of all production equipment shall be apportioned to the taxing district in which such property is physically located.
(2) The taxable value of all other taxable property, including wind or solar energy conversion equipment, shall be apportioned to each taxing district in the proportion that the cost of such other taxable property physically located in each taxing district is of the total cost of such other taxable property physically located in this state.
(E) For tax year 2011 and thereafter, in the case of the taxable property of a rural electric company:
(1) The taxable value of all production equipment shall be apportioned to the taxing district in which such property is physically located.
(2) The taxable value of all its other taxable property, including wind or solar energy conversion equipment and excluding production equipment, shall be apportioned to each taxing district in the proportion that the cost of such other taxable property physically located in each taxing district is of the total cost of such other taxable property physically located in this state.
(F) In the case of all other public utilities, the value of the property to be apportioned shall be apportioned to each taxing district in proportion to the entire value of such property within this state.
Sec. 5727.75.  (A) For purposes of this section:
(1) "Full-time employee" means an individual employed at a qualified energy project for services to be performed for not less than two thousand eighty hours per year, including hours for leave granted by contract, law, or custom.
(2) "Qualified energy project" means a wind or solar energy project certified by the director of development pursuant to this section.
(3) "Wind or solar energy project" means a project to provide electric power through the construction, installation, and use of a wind or solar energy facility.
(B)(1) Tangible personal property of a wind energy project that is a qualified energy project is exempt from taxation for tax years 2011 and 2012 if both of the following circumstances exist on December 31, 2010:
(a) The owner or a lessee pursuant to a sale and leaseback transaction of the wind energy project has obtained a certificate from the power siting board required under section 4906.20 of the Revised Code, or if that section does not apply, has obtained any approval, consent, permit, or certificate or has satisfied any condition required by a public agency or political subdivision of this state for the construction of a wind energy project.
(b) Project construction has commenced.
(2) Tangible personal property of a solar energy project that is a qualified energy project is exempt from taxation for tax year 2011. Personal property of a solar energy project that is a qualified energy project is exempt from taxation for tax year 2012 if both of the following occur:
(a) The owner or a lessee pursuant to a sale and leaseback transaction of the solar energy project obtains any approval, consent, permit, or certificate or has satisfied any condition required by a public agency or political subdivision of this state for the construction or initial operation of a solar energy project before January 1, 2011.
(b) Project construction commenced before August 1, 2011.
(3) If tangible personal property of a qualified energy project was exempt from taxation under this section for tax years 2011 and 2012 and the certification under division (C) of this section has not been revoked, the tangible personal property of the qualified energy project is exempt from taxation for tax year 2013 and the ensuing seventeen tax years if the property was placed into service before January 1, 2013. Tangible personal property not placed into service on that date is taxable property subject to taxation. A wind or solar energy project for which certification has been revoked is ineligible for further exemption under this section. Revocation does not affect the tax-exempt status of the wind or solar energy project tangible personal property for the tax year in which revocation occurs or any prior tax year.
(C) On or before September 30, 2010, a person may apply to the director of development for certification of a wind or solar energy project as a qualified energy project. At the time the application is submitted, the person shall submit an application fee established by the director. The director shall certify a wind or solar energy project if the application and fee have been timely submitted and the director determines that the person, upon placement of the wind or solar energy facility into service, would be a wind or solar energy company. The director shall revoke a certification if the director determines the person, or subsequent owner or lessee pursuant to a sale and leaseback transaction of the qualified energy project, has failed to comply with any requirement under this section. Upon certification or revocation, the director shall notify the person, owner, or lessee, the tax commissioner, and the county auditor of a county in which the wind or solar energy project is located of the certification or revocation. Notice shall be provided in a manner convenient to the director.
(D) The owner or a lessee pursuant to a sale and leaseback transaction of a qualified energy project shall do each of the following:
(1) Comply with all applicable regulations;
(2) With respect to a wind energy project, require in any contract for the construction or installation of the wind energy facility that all laborers and mechanics employed for the construction or installation of the facility shall be paid at the prevailing rates of wages of laborers and mechanics for the class of work called for, which wages shall be determined in accordance with the requirements of Chapter 4115. of the Revised Code for the determination of prevailing wage rates.
(3)(a) Establish a procurement goal of five per cent for contracting with minority or EDGE business enterprises in the award of contracts for the construction, installation, or maintenance of a wind or solar energy facility based on the availability of eligible program participants by region or geographic area.
(b) Establish a minority workforce goal of ten per cent in the construction, installation, or maintenance of a wind or solar energy facility.
If either goal is not attained, the owner or lessee shall show evidence of a good faith effort to attain the goal. For purposes of division (D)(3) of this section, "minority business enterprise" has the same meaning as in section 122.71 of the Revised Code, "EDGE business enterprise" means a business certified as such pursuant to section 123.152 of the Revised Code, and "minority" means African Americans, American Indians, Hispanics or Latinos, and Asians.
(4) File with the director of development a certificate of completion not later than sixty days after completion of the wind or solar energy facility's construction and, if applicable, file a certificate of partial completion on or before March 1, 2013. A certificate of partial completion shall state the nameplate capacity of the facility as of January 1, 2013.
(5) File with the director of development, in a manner prescribed by the director, a report of jobs created at the qualified energy project, the total number of full-time employees employed at the project, and the total number of full-time employees employed at the project who are domiciled in Ohio;
(6) Repair all roads affected by construction as reasonably required to restore them to their preconstruction condition;
(7) Provide or facilitate training for fire and emergency responders for response to emergency situations related to the qualified energy project and, at the person's expense, equip the fire and emergency responders with proper equipment as reasonably required to enable them to respond to such emergency situations;
(8) Maintain a ratio of full-time, Ohio-domiciled employees employed in the qualified energy project to total full-time employees employed in the qualified energy project of not less than eighty per cent in the case of a solar energy project and not less than fifty per cent in the case of a wind energy project. In the case of a wind energy project for which certification from the power siting board is required under section 4906.20 of the Revised Code, the number of employees employed in the qualified energy project equals the number actually employed or the number projected to be employed in the certificate application, if such projection is required under regulations adopted pursuant to section 4906.03 of the Revised Code, whichever is greater.
(9) In the case of a wind or solar energy project with a nameplate capacity in excess of two megawatts, establish a relationship with a member of the university system of Ohio as defined in section 3345.011 of the Revised Code or with a person offering an apprenticeship program registered with the employment and training administration within the United States department of labor or with the apprenticeship council created by section 4139.02 of the Revised Code, to educate and train individuals for careers in the wind or solar energy industry. The relationship may include endowments, cooperative programs, internships, apprenticeships, research and development projects, and curriculum development.
(10) Offer to sell power or renewable energy credits from the qualified energy project to electric distribution utilities or electric service companies subject to renewable energy resource requirements under section 4928.64 of the Revised Code that have issued requests for proposal for such power or renewable energy credits. If no electric distribution utility or electric service company issues a request for proposal on or before December 31, 2010, or accepts an offer for power or renewable energy credits within forty-five days after the offer is submitted, power or renewable energy credits from the qualified energy project may be sold to other persons. Contracts for the sale of power or renewable energy credits before the effective date of this section as enacted by this act are not subject to division (D)(10) of this section.
(11) Make annual service payments as required by division (E) of this section.
(E) The owner or a lessee pursuant to a sale and leaseback transaction of a qualified energy project shall make annual service payments in lieu of taxes to the county treasurer on or before the final dates for payments of taxes on public utility personal property on the real and public utility personal property tax list for each tax year for which property of the wind or solar energy project is exempt from taxation under this section. Each payment shall be charged and collected in the same manner as such taxes and in the following amount:
(1) In the case of a solar energy project that is a qualified energy project, for tax year 2011, seven dollars per kilowatt of nameplate capacity as of January 1, 2013;
(2) In the case of a wind energy project that is a qualified energy project, the following for tax year 2011:
(a) If the project maintains a ratio of full-time, Ohio-domiciled employees to total full-time employees of not less than seventy-five per cent, six dollars per kilowatt of nameplate capacity as of January 1, 2013;
(b) If the project maintains a ratio of full-time, Ohio-domiciled employees to total full-time employees of less than seventy-five per cent but not less than sixty per cent, seven dollars per kilowatt of nameplate capacity as of January 1, 2013;
(c) If the project maintains a ratio of full-time, Ohio-domiciled employees to total full-time employees of less than sixty per cent but not less than fifty per cent, eight dollars per kilowatt of nameplate capacity as of January 1, 2013.
(3) For tax year 2012 and each subsequent tax year, the amounts stated in divisions (E)(1) and (2) of this section shall increase by an amount equal to the amount applicable to the prior tax year multiplied by one hundred two per cent.
(F) The director of development in consultation with the tax commissioner shall adopt rules pursuant to Chapter 119. of the Revised Code to implement and enforce this section.
Section 2.  That existing sections 5727.01, 5727.02, 5727.06, 5727.11, 5727.111, and 5727.15 of the Revised Code are hereby repealed.
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